In this Research Note, we examine Budderfly, the US Energy Efficiency-as-a-Service (EEaaS) company focused on Small and Medium-sized Enterprises (SMEs) and franchise businesses. This analysis covers their business model, funding, majority ownership, growth and outlook for 2024.

Founded in 2007 and headquartered in Shelton, Connecticut, Budderfly implements proprietary energy intelligence software, energy-efficient technology upgrades that span more than 25 savings categories, and IoT devices that meter, control, and optimize energy usage at the point of consumption within each facility across the enterprise.

With no cost to its clients, Budderfly finances projects in USA and Canada, specializing in repeatable footprint businesses with a major focus on food service such as Quick-Service Restaurants (QSR) and family dining, C-Stores, YMCAs, medium-sized colleges and Prep Schools, and nursing homes.

Budderfly’s Efficiency-as-a-Service model provides up-front funding for building energy audits, project design, commissioning, new equipment, and maintenance. The 10-year contract covers ongoing maintenance and is structured to be paid by resulting energy cost savings. Additionally, Budderfly offers 10-year solar contracts and community solar connections.

Budderfly Funding

Edison Partners first invested in the company in June 2017, when it led an initial $22 million financing round. Later, they participated in follow-on rounds where Budderfly raised an additional $55 million in June 2019. Edison Partners exited its portfolio company when Partners Group invested in the company in July 2022.

Total funding for Butterfly amounted to $84.5 million, before the acquisition by Partners Group.

Acquisition of a Majority Stake

In July 2022, Partners Group, a Swiss-listed private markets firm (PGHN:SWX), acquired a majority equity stake in Budderfly and committed further growth capital totalling more than $500 million. Partners Group aims to transform Budderfly into a multi-billion-dollar infrastructure platform by investing to expand its customer base and solutions offering.

Partnerships

In March 2023, Budderfly, announced a high-volume contract with Carrier, to deploy more than 2,000 of Carrier’s most efficient commercial packaged rooftop units to small and medium-sized businesses across America, primarily fast food, quick service and casual dining restaurants. This agreement will enable Budderfly’s customers to start saving and accelerate the reduction of their carbon emissions.

In December 2023, the company announced a strategic partnership with Fujitsu General America, Inc. (“FGAI”), a subsidiary of one of Japan’s leading providers of air conditioning equipment to develop and deploy high-efficiency energy technologies for mid-market businesses across the United States.

Under the terms of the agreement, Budderfly will leverage FGAI’s AIRSTAGE Variable Refrigerant Flow (VRF) Systems as the core component for its Ultra High Performance (UHP) heating, ventilation, and air conditioning (HVAC) architecture. The state-of-the-art heat pump and ventilator-separated system is the most advanced HVAC solution specifically designed for the approximately 94% of U.S. commercial buildings under 50,000 square feet.

Growth

Budderfly has grown its portfolio of customer sites from about 2,750 to more than 5,000 businesses across the United States since July 2022. The company has also added more than 100 employees in recent months with LinkedIn reporting 227 employees.

According to the CEO, Budderfly was on track to generate more than $100 million in revenue in 2023, roughly double what it earned in 2022. And is forecasting to double revenues again in 2024, to more than $200 million.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.